How Good Is a Credit Score of 656?

FT Contributor
A person checking their credit score on their phone.

According to Experian’s credit score range, a credit score of 656 officially ranks as “Fair.”

While it’s not a “Very Poor” ranking, a credit score of “Fair” might mean extra work to qualify for loans and credit cards. When their credit card or loan applications are accepted, individuals with 656 credit scores are often subject to additional fees and high interest rates.

Improving a 656 credit score starts when borrowers take steps to improve their finances. The first step is an easy one: use a free, secure credit reporting platform like to receive regular updates on any new credit score changes or fluctuations.

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Why Your Credit Score Is 656

Repairing a Fair credit score of 656 starts with an informed understanding of the factors contributing to the score itself. While it’s impossible to identify the exact influences on a 656 credit score, they can include inconsistent payment history, high levels of overall debt, and defaulted loans.

Inconsistent Payment History

Payment history accounts for 35% of a borrower’s total credit score and is one of the main factors that determines whether he or she is approved for a new line of credit, loan, or credit card.

Complete, on-time payments toward credit balances can help keep total debt low and help improve credit score. However, a credit score of 656 may indicate a history of inconsistent or late payments, all of which can compromise your credit score long after a payment window is missed.

Here’s the good news: there’s a simple solution for anyone looking to improve their credit score and solidify payment history; establish a habit of on-time, complete payments toward existing debts.

The lower your overall debt becomes, and the more regular your payments toward credit balances become, the more likely your credit score is to see an increase.

No matter your monthly income, you can take steps toward establishing a regular payment history. Disciplined spending habits are key here, and can eventually help improve your credit score to “Good” from Fair.

Look to limit unnecessary purchases or shopping sprees; instead, reserve large portions of your income toward paying down debts, especially debts with considerable interest rates or associated late fees.

High Levels of Debt

Total debt also plays a large role in determining an individual’s overall credit score. Specifically, credit owed accounts for 30% of the credit score equation. Credit scores of 656 are often characterized by high levels of unpaid debt, where debts are carried through multiple payment periods without being sufficiently paid down.

Sometimes, high debt levels are normal. For example, anyone recently approved for a loan owes potentially high debts, especially if that loan is meant to cover a mortgage, a vehicle, or another sizable purchase or investment.

If you are committed to improving your credit score, make consistent payments against high debt levels a priority, even if it means consolidating debt and reducing monthly spend on leisure purchases.

Defaulted Loans

Loans are signed based on agreements that, eventually, money is to be repaid. While one missed payment won’t sink your credit score, especially if lenders allow delinquent payments without excessive fees, loans that are ignored for extended periods can enter default.

Defaulted loans identify debt that has yet to be paid according to agreements between the lender and borrower, and grant the lender legal options in pursuing repayment.

As loan default can quickly lower your credit score, borrowers should prioritize payments toward defaulted loans, to avoid high fees, significant interest rates, and the possibility of bankruptcy or further legal action.

What Can You Do With a 656 Credit Score?

A Fair credit score of 656 might make it more difficult to spend money in the ways you want to. However, while the best rewards-based credit cards, lowest mortgage rates, and most affordable car insurance premiums might be unavailable, there are still options to help you secure the funding you need.

Consult the below information to understand the financial opportunities available to you with a credit score of 656.

  • Securing a personal loan is important for funding personal projects, whether that’s a home renovation or a destination wedding.
  • Obtaining a rewards-based credit card can earn you airline miles, hotel points, and even incentives from your favorite retailers.
    • A credit score of 656 won’t qualify you for many of these cards, though you can still secure a credit card from many of your favorite stores, potentially with 0% financing available.
  • Landing an apartment rental is possible for some individuals with a 656 credit score, depending on the apartment community. Many apartment complexes will accept lesser credit scores, especially since residents often haven’t yet benefitted from regular mortgage loan payments.
  • Acquiring a mortgage loan with a credit score of 656 is possible with some lenders, though your loan will likely be subject to substantial fees and higher monthly premiums. Some lenders offer loans specifically for lower credit scores, which may make a mortgage loan more attainable.
  • How to Repair a 656 Credit Score

    A credit score of 656 means there’s work to do before you can earn a “Good” or even an “Exceptional” ranking. However, there are concrete steps you can take which will help to raise your credit score.

    First, you’ll want to address any outstanding debts, particularly from loans in default. Prioritize loans with sky-high interest rates, or payments owed to collections agencies.

    Beyond that, make sure you’re practicing healthy finance. Minimize impulse purchases, and pay down old credit at least as fast as you’re accruing new credit. As your credit ages and your total debt is reduced, your credit score will have opportunities for regular increase.

    Repairing your credit score can also mean disputing inaccuracies in existing financial records. Professional credit repair companies can help you take steps to systematically increase your credit score; the best credit repair agencies even offer guaranteed credit score improvement by specific dates, and can help you navigate credit improvement, even communicating with financial institutions on your behalf.

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